[Learning from History] Hyosung Group’s announcement of its management normalization in 1983

2014. 5. 21. 17:04

Hyosung Group’s announcement of its management normalization in 1983

On June 29, 1983, Chairman Cho announced ‘the management normalization plan’ paving the way towards innovation under circumstances where Korean companies gave poor showings, and affirmed a strong determination for the 2nd start before the world. With the announcement, he declared that Hyosung would improve its financial structure by restructuring 24 affiliated companies through merger, disposal and liquidation and at the same time, establish an integrated management system built around major 8 companies. 

According to this plan, the textile businesses of the group were first reorganized with Dongyang Nylon as the center and second, the heavy industry businesses were merged into Hyosung Heavy Industries, third, the trading businesses were consolidated into Hyosung Trading and last, the remaining 5 companies were either sold or liquidated. Hyosung Group not only restructured affiliated companies, but also sold non-essential real estate of its affiliated companies and by doing so, solidified its financial structure. 

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Hyosung Group’s efforts to normalize its management along with contribution from Chairman Cho following the liquidation of his personal assets, which today would be worth 10 trillion won, were recognized by the government authorities as a well-timed, active measures. As a result of such company-wide efforts led by Chairman Cho, Hyosung was able to normalize its management and ensure a solid financial structure while the efficient management system established helped some affiliated companies get out of years of deficit operation and eventually, turn their business into a surplus.

Furthermore, Hyosung was ranked 216th in the 1984 Fortune International 500 (largest non-US industrial corporations in the world) published in the August issue in 1985. In this Fortune International 500, a ranking of top 500 corporations worldwide as measured by revenue, 10 Korean companies including Hyosung were listed. Hyosung, especially ranked 238th in 1983 and 216th in 1984 after it was first listed in 238th rank in 1982, and showed the world its sustained growth.   

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